Proceeds of Crime Bill

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Mr. Foulkes: I beg to move amendment No. 45, in page 33, line 28, leave out subsection (2) and insert—

    `(2) But this section does not apply if—

    (a) the confiscation order was made by the Court of Appeal, and

    (b) when the Crown Court comes to proceed under this section the confiscation order has been satisfied.'

This technical amendment is related to Government amendment No. 38, which we have already discussed. As the Committee will be aware, clause 52 applies automatically when the director is appointed as enforcement authority. Therefore, when the Court of Appeal appoints the director as enforcement authority following an appeal by the prosecutor or director, there is no need for it to direct the Crown court to proceed under the clause. That was why we deleted clause 33(11). As the Court of Appeal does not need to direct the Crown court to proceed under the clause, subsection (2) is not appropriate. In short, amendment No. 45 amends the clause to remove the reference to the Court of Appeal directing the Crown court. However, the effect of subsection (2) will continue to be that if the confiscation order has already been satisfied the Crown court is not obliged to make an order for the appointment of a director's receiver.

Amendment agreed to.

Clause 52, as amended, ordered to stand part of the Bill.

Clause 53


Amendments made: No. 46, in page 34, line 9, leave out from `property' to end of line 10.

No. 47, in page 35, line 9, at end insert—

    `(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Bob Ainsworth.]

Clause 53, as amended, ordered to stand part of the Bill.

Clause 54

Enforcement receivers

Question proposed, That the clause stand part of the Bill.

Mr. Grieve: The clause specifies how sums in the hands of the receiver are to be disposed of after a confiscation order has been made. Will the Minister provide clarification of the system that will be used in such a case?

Mr. Bob Ainsworth: The clause will apply to an enforcement receiver appointed under clause 50 on the application of the prosecutor-—that is, in cases in which the director is not the enforcement authority. It specifies how sums in the hands of the receiver are to be disposed of after a confiscation order has been made. The sums are payable subject to certain prior payments, which the Crown court may order, to the enforcing justices' chief executive. Subsection (3) requires that, once a confiscation has been satisfied, any surplus sums in his hands must be paid as directed by the court to those with an interest in the property concerned. Hon. Members will also notice that the Crown court must give those with interests in the property concerned a reasonable opportunity to make representations before making directions under subsection (3). I hope that I have clarified the points about which the hon. Gentleman was concerned. If not, I am sure that he will pop up and ask further questions.

Question put and agreed to.

Clause 54 ordered to stand part of the Bill.

Clause 55

Sums received by justices' chief executive

Mr. Grieve: I beg to move amendment No. 134, in page 36, line 29, leave out subsection (7).

The Chairman: With this it will be convenient to take amendment No. 135, in clause 57, page 38, line 4, leave out subsection (6).

Mr. Grieve: My earlier question was a lead-in to clause 55, which concerns the sums received by justices' chief executives. The clause, as we are told helpfully in the explanatory notes, sets out how an enforcing justices' chief executive must dispose of any moneys received in satisfaction of a confiscation order, whether from a receiver appointed under clause 50 or otherwise. We are told that the provision is similar to the current legislation except that an existing power for the justices' chief executive to reimburse the prosecutor out of confiscated moneys for sums the prosecutor has paid to a receiver in advance has been abolished, and the money will go to the Consolidated Fund.

After reading that note, I read clause 55. I had great difficulty understanding subsection (7), which is why I tabled an amendment to remove it, on the basis that, if I could not understand it, perhaps it had no business to be in the Bill. The sensible thing to do may be for me to sit down to allow the Minister to explain it.

Mr. Ainsworth: The hon. Gentleman employs a dreadfully unfair tactic. If he looks at my copy of the Bill, he will notice that there are a number of question marks scribbled by subsection (7) as well. I shall attempt to help him understand how subsection (7) works.

The amendment would require the Crown to bear the cost of enforcing a compensation order where payment of the order was ordered out of confiscation money. The Bill carries forward existing legislation. The effect of clause 14(5) and (6) is to empower the court, where it makes both a confiscation order and a compensation order in the same proceedings, to order any shortfall in the payment of the compensation order out of the confiscation money, provided that the offender does not have sufficient funds to pay both orders. In effect, the provision enables the enhanced confiscation order enforcement powers to be applied to assist victims to receive their compensation.

The provisions that the amendment would delete deduct the cost of enforcement, pro rata, from any confiscated money that is paid out to satisfy the compensation order.

Mr. Grieve: It seems that flagging the matter has a wider purpose than merely examining the drafting. I thought that what the Minister said was happening, although I was not 100 per cent. sure. The matter is extraordinary because a sum that a person has been ordered to receive by the court is deducted from compensation orders. I am worried about the effect on victims of crime.

Mr. Ainsworth: The hon. Gentleman is right. He has stumbled on an important matter which should be exposed to scrutiny. I shall continue to explain the Bill's current provisions and he may raise any resulting matters.

There is a special provision in the confiscation regime in which both orders are made in the same case. Confiscation enforcement techniques may be used exceptionally to enforce a compensation order. Under such circumstances, compensation order recipients would enjoy the benefits of enforcement techniques to which they would not normally be entitled. Therefore, it is reasonable that they should bear their share of enforcement costs on a pro rata basis. I tell the hon. Gentleman—for the benefit of what he may wish to say, although he probably has more knowledge than I about the matter—that compensation orders, even those ordered by the Crown court, are relatively small. We envisage that confiscation orders will be made for substantial amounts. Therefore, the costs must be pro rata to ensure that, in the majority of cases, only a small proportion of costs will be reclaimed from the compensation order rather than attached to the confiscation.

That is the Government's thinking about the Bill. The hon. Gentleman did not stumble over only a drafting matter; it is a more important matter which he may wish to pursue.

Mr. Grieve: Clearly, I had understood the gist of the provision, which raises some interesting issues. The Minister may be able to enlighten the Committee about his comment that, at the moment, the compensation regime does not cover costs. I was slightly surprised to hear that because, although that may be so in theory, I have not been aware in practice of an order for compensation being made and resulting in complex costs of enforcement, partly I suspect because generally speaking the money has been readily available for that.

Mr. Ainsworth: I hope that I did not say that. I did not mean to. I was trying to say that, at present the provisions are not available to enforce compensation, so powers under the confiscation regimes can be used to benefit victims. The provisions are not at present available for victims, so that route would not be available—not that currently they would have to pay.

Mr. Grieve: The Minister is most helpful. As I said, I must beware of giving the impression of having an excessive knowledge. I was familiar six, seven or eight years ago with cases in which compensation orders were made, but not from the field of practice in which I have been working more recently. I do not remember as a matter of practice difficulty being experienced when the court rules that compensation of £1,500 is payable to the victim and deductions are made from the sums that have been ordered, although, if that sum were not readily available—in my experience it usually has been—I suppose that some costs could, theoretically, be incurred.

The circumstances in this case are rather different. The Minister said that the chances are that the confiscation orders will be made in respect of very substantial amounts, as we hope. I accept that the costs of realising those assets may be substantial. We cannot escape that. The Government will no doubt do their best to minimise the cost, as will the court and even, I suppose, the receiver, although perhaps I have a slight prejudice against receivers.

Large sums are involved. The victim, who may in some circumstances have had an order made that he should be compensated by a small sum, may find when the cheque finally arrives in the post that a pro rata deduction has been made to reflect the enforcement costs. I wonder whether that might cause a sense of injustice. I can envisage The Sun headlines when the court orders that a victim of crime should receive £2,500 compensation and she receives only £2,000 as the enforcement costs on the huge sum involved in the confiscation have, unfortunately, swallowed up an awful lot because of the receiver or other circumstances.

I accept the Minister's point that it would be perfectly legitimate to argue that the person receiving the compensation has been the beneficiary of the skills of the receiver in realising the assets. However, I have serious doubts that, in practice under compensation orders, huge problems have been experienced in realising assets. The Minister may know much more than I do about getting hold of assets to pay people under compensation orders. I believe that the system may ultimately be criticised because it seems unjust to the victim, who will often receive a small sum.

The matter seems to be a public policy issue. A long time ago, Parliament introduced compensation orders so that victims should be compensated by criminals to a sum assessed by the judge as fair and reasonable for the victim to receive. We are now introducing a system in which the victim will find that moneys have been deducted from that payment to cover administrative costs. I do not believe that that has happened in the past. Far from the poor old victim thinking that he has benefited from the confiscation regime, he will feel that it has done him out of a sum of money.

10.45 am

The question will then be: who should have priority in relation to confiscated assets? Should it be the victim or the state? My view is that it should be the victim. If the court has said that a victim needs compensation, the state, which obviously wants to confiscate assets, should give priority for compensation to the victim. In those circumstances, I ask the Minister to reconsider whether subsection (7) should be included. At the moment, I am open to persuasion that it should be maintained. I will not necessarily press the matter to a vote, but I am worried about it. It seems like the heavy hand of bureaucracy affecting the rights of victims and the compensation that the court feels that they should receive.

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